HomeMy WebLinkAbout10/07/2014 05G Consent for Transaction between Charter Communications, Inc. and Comcast Corporation (Franchise Ordinance 2014-016)BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 5.G.
For Meeting of: October 07, 2014
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ITEM TITLE: Ordinance granting consent to a contemplated transaction
between Charter Communications, Inc. and Comcast
Corporation
SUBMITTED BY: Randy Beehler, Communications & Public Affairs Director
SUMMARY EXPLANATION:
In June of this year, the City was notified by Comcast Corporation ("Comcast") that it was
seeking the approval of the Yakima City Council of a contemplated transaction that would result
in the current grantee of a City of Yakima cable communications system franchise, Falcon
Video Communications, L.P. ("Falcon"), becoming a wholly-owned subsidiary of Comcast.
Falcon's current parent company is Charter Communications, Inc. ("Charter").
As required by the franchise and federal law, the Community Relations office has completed a
review of contemplated Charter -Comcast transaction and has determined that Comcast is
consummately capable of operating the cable system and complying with the franchise.
Therefore, it is recommended that the City Council approve an ordinance granting consent to
the contemplated Charter -Comcast transaction at its October 7th business meeting.
Resolution:
Other (Specify):
Contract: Contract Term:
Start Date: End Date:
Amount:
Ordinance: X
Item Budgeted: NA
Funding Source/Fiscal
Impact:
Strategic Priority:
Insurance Required? No
Mail to:
Phone:
Public Trust and Accountability
APPROVED FOR
RECOMMENDATION:
City Manager
Approve an ordinance granting consent to the contemplated Charter -Comcast transaction.
ATTACHMENTS:
Description
Ordinance granting consent to a contemplated
transaction between Charter Communications,
Inc. and Comcast Corporation
Memorandum Proposed Charter -Comcast
Transaction
Ordinance No. 2014-016 Cable Communications
System Franchise
Upload Date Type
9/19/2014
9/19/2014
9/19/2014
Cover Memo
Cover Memo
Cover Memo
AN ORDINANCE
ORDINANCE NO. 2014 -
relating to the cable communications franchise granted to Falcon Video
Communications, L.P. as granted under City of Yakima Ordinance No.
2014-016 and approving a transaction resulting in Falcon Video
Communications, L.P. becoming a wholly-owned subsidiary of Comcast
Corporation.
WHEREAS, Falcon Video Communications, L.P. ("Falcon") is duly authorized to operate
and maintain a cable communications system in the city of Yakima, Washington, pursuant to
the terms and conditions of a cable communications franchise as granted by the City of Yakima
(the "City") under City of Yakima Ordinance No. 2014-016 (the "Franchise"); and
WHEREAS, Charter Communications, Inc. ("Charter") is the ultimate parent company of
Falcon; and
WHEREAS, on April 25, 2014, Charter and Comcast Corporation ("Comcast") entered
into the Comcast/Charter Transactions Agreement (the "Agreement"); and
WHEREAS, pursuant to the Agreement, Falcon will become a wholly-owned subsidiary
of Comcast (the "Transaction"); and
WHEREAS, a completed Federal Communications Commission Form 394 has been
filed with the City; and
WHEREAS, the City has conducted a review of the Transaction; and
WHEREAS, Falcon, Charter, and Comcast have requested consent by the City to the
Transaction, to the extent that such consent is required under the Franchise, in accordance with
the terms, conditions and requirements of the Franchise; now, therefore,
BE IT ORDAINED BY THE CITY OF YAKIMA:
SECTION 1. The City hereby consents to and approves the Transaction, to the extent
such consent is required by the terms and conditions of the Franchise and applicable law, and
the assumption by Comcast of all obligations and liabilities of Falcon and Charter under City of
Yakima Ordinance No. 2014-016, known and unknown, subject to applicable law, effective
immediately upon the closing of the Transaction as contemplated by the Agreement.
SECTION 2. The City confirms that the Franchise is valid and outstanding and in full
force and effect and that there are no defaults under the Franchise. Subject to compliance with
the terms of this ordinance, all action necessary to approve the transfer of control of Falcon to
Comcast has been duly and validly taken.
SECTION 3. Providing that Comcast fully complies with any and all notification and
consent provisions as described in Section 2.9 and Section 2.10 of the Franchise, Comcast
may: (a) assign or transfer its rights, responsibilities, obligations and liabilities, known or
unknown, subject to applicable law, in the Franchise to an entity directly or indirectly controlling,
controlled by or under common control with Comcast; (b) restructure debt or change the
ownership interests among existing equity participants in Comcast and/or its affiliates;
(c) pledge or grant a security interest to any lender(s) of Comcast's assets, including, but not
limited to, the Franchise, or of interest in Comcast, for purposes of securing any indebtedness;
(d) sell equity interests in Comcast or any of Comcast's affiliates.
SECTION 4. The Franchise, as granted by City of Yakima Ordinance No. 2014-016,
shall be amended upon the effective date of this ordinance, as set forth in this ordinance.
SECTION 5. Upon the closing of the Transaction, Falcon and Comcast shall remain
bound by the lawful terms and conditions of the Franchise.
SECTION 6. Upon the date this ordinance becomes effective, this ordinance shall
have the force of a continuing agreement with Comcast and shall not be amended, changed or
otherwise altered without the consent of the City and Comcast.
SECTION 7. This ordinance shall be in full force and effect thirty (30) days after its
passage, approval and publication as provided by law and by the City Charter.
PASSED BY THE CITY COUNCIL, signed and approved this day of , 2014.
ATTEST:
City Clerk
Publication Date:
Effective Date:
-2-
Micah Cawley, Mayor
NE ED
HELM
To: Yakima City Council Members
From: Communications & Public Affairs Director Randy Beehler
Subject: Proposed Charter -Comcast Transaction
Date: Wednesday, October 1St, 2014
Council Members,
On June 17th, 2014, the City was notified by Comcast Corporation ("Comcast") that it was
seeking the City Council's approval of a contemplated transaction that would result in the current
grantee of a City of Yakima cable communications system franchise, Falcon Video
Communications, L.P. ("Falcon") becoming a wholly-owned subsidiary of Comcast. Falcon's
current parent company is Charter Communications, Inc. ("Charter").
Under Section 2.9 and Section 2.10 of the cable franchise currently held by Falcon (Ordinance
No. 2014-016), the City has the right and responsibility to approve or deny any sale, transfer of
ownership, or change in control of the franchise and/or the cable system it provides authority to
Falcon to operate. Since being notified by Comcast of the contemplated transaction, and as
required by the franchise and federal law, the Community Relations office has conducted a
review of the contemplated transaction to determine whether Comcast has the legal, financial,
and technical capability to operate the cable system and to comply with the franchise.
As a result of that review, the Community Relations office has determined that Comcast is
consummately capable, legally, financially, and technically, of operating the cable system and
complying with the franchise. Therefore, I am recommending that the City Council approve an
ordinance giving its consent to the contemplated Charter -Comcast transaction at the City
Council's October 7th business meeting.
Falcon becoming a wholly-owned subsidiary of Comcast is part of a larger transaction under
which Charter and Comcast anticipate divesting a number of cable systems throughout the
United States. Comcast is working to complete a merger with Time Warner. If the Comcast -
Time Warner merger and the Charter -Comcast transaction are ultimately completed, a new entity
known as SpinCo will be created to operate cable systems providing service to about four million
subscribers. The creation of SpinCo is intended to ease some concerns that have been raised
about Comcast potentially controlling a disproportionate share of the cable industry as a result of
its merger with Time Warner.
The Comcast -Time Warner merger and the Charter -Comcast transaction are currently being
reviewed and evaluated by the Federal Communications Commission. Were the City Council to
approve an ordinance giving its consent to the contemplated Charter -Comcast transaction, the
ordinance would not be fully effective until! the completion of the Charter -Comcast transaction.
Please let me know if you have any questions regarding this issue prior to the City Council's
October 7th business meeting.
City of Yakima
Cable
Communications
Franchise
ORDINANCE
NO. 2014-016
Page i
TABLE OF CONTENTS
SECTION 1. DEFINITIONS. 1
1.1 Affiliate 1
1.2 Applicable Law 1
1.3 Basic Service or Basic Cable Service 2
1.4 Cable Act 2
1.5 Cable Communications System or Cable System or System 2
1.6 Cable Service 2
1.7 Channel 2
1.8 Charter 2
1.9 City 2
1.10 FCC 3
1.11 Franchise or Franchise Ordinance 3
1.12 Franchise Area 3
1.13 Franchise Fee 3
1.14 Generally Accepted Accounting Principles or GAAP 3
1.15 Gross Revenues 3
1.16 Leased Access 5
1.17 Master Control Center or Control Center 5
1.18 Pay Service or Premium Service 5
1.19 Person 5
1.20 Public, Educational or Government (PEG) Access Channel 5
1.21 Street 5
1.22 Subscriber 6
SECTION 2. FRANCHISE 6
2.1 Grant of Franchise 6
2.2 Franchise Term 6
2.3 Franchise Area 6
2.4 Franchise Non-exclusive 6
2.5 Franchise Required 7
2.6 Equal Protection 7
2.7 Franchise Renewal or New Franchise 8
2.8 Periodic Public Review of Franchise and Franchise Modification 8
2.9 Sale or Transfer of Ownership Franchise 9
2.10 Change in Control 9
2.11 Right to Purchase the System 9
2.12 Continuity of Service Mandatory 10
2.13 Other Codes or Ordinances 10
SECTION 3. OPERATION IN STREETS AND RIGHTS-OF-WAY. 11
3.1 Use of Streets 11
3.2 Construction or Alteration 11
3.3 Compliance with Codes 11
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3.4 Construction Standards 11
3.5 Safety 11
3.6 Non -Interference 12
3.7 Use of and Erection of Poles 12
3.8 Consistency with Designated Use 12
3.9 Undergrounding 12
3.10 Open or Joint Trenching 13
3.11 Restoration 13
3.12 Access Through Private Property 14
3.13 Relocation 14
SECTION 4. SYSTEM DESIGN AND CAPACITY. 15
4.1 Availability of Signals and Equipment 15
4.2 Free Drops and Cable Service 15
4.3 Right of Inspection of Construction 15
4.4 Emergency Alert Capability 16
4.5 Standby Power 16
4.6 Technical Standards 16
4.7 Performance Testing 16
SECTION 5. PROGRAMMING AND SERVICES. 17
5.1 Categories of Programming Service 17
5.2 Changes in Video Programming Services 17
5.3 Obscenity 17
SECTION 6. PUBLIC, EDUCATIONAL AND GOVERNMENTAL
ACCESS 17
6.1 PEG Access Channels 17
6.2 Management and Control of PEG Access Programming 18
6.3 Location of PEG Channels 19
6.4 Digital Channels After Digital Transition 19
6.5 Interconnection of PEG Access Channels 20
6.6 Technical Quality of PEG Access Channels 20
6.7 Change in Technology 21
6.8 Support for PEG Access Channels 21
6.9 Annual Report to City 21
SECTION 7. REGULATORY PROVISIONS 22
7.1 Intent 22
7.2 Delegation of Authority to Regulate 22
7.3 Areas of Administrative Authority 22
7.4 Right to Regulate 22
7.5 Notice of Change in Rates and Charges 22
7.6 Rate Discrimination Prohibited 23
7.7 Privacy 23
7.8 Remedies for Franchise Violations 23
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7.9 Procedure for Remedying Franchise Violations 24
7.10 Minor Violations 24
7.11 Revocation 24
7.12 Right to Require Removal of Property .. 25
7.13 Enforcement 26
7.14 Failure to Enforce 26
7.15 Force Majeure 26
7.16 Alternative Remedies 27
7.17 Compliance with the Laws 27
SECTION 8. REPORTING REQUIREMENTS. 27
8.1 Annual Report 27
8.2 Monitoring and Compliance Reports 28
8.3 Public Disclosure 28
8.4 Communications with Regulatory Agencies 28
SECTION 9. CUSTOMER SERVICE POLICIES. 28
9.1 Customer Service Standards 28
9.2 Customer Service Agreement and Manual 29
9.3 Subscriber Billings 29
SECTION 10. LINE EXTENSION POLICY 29
10.1 Standard Installation 29
10.2 Isolated Areas 29
10.3 Annexation 30
SECTION 11. COMPENSATION AND FINANCIAL PROVISIONS 30
11.1 Franchise Fees 30
11.2 Inspection of Records 31
11.3 Insurance 32
11.4 Waiver, Indemnify, No Estoppel, No Duty 34
SECTION 12. MISCELLANEOUS PROVISIONS. 36
12.1 Voluntary Agreement 36
12.2 Governing Law and Venue 36
12.3 Separability 36
12.4 Consent 36
12.5 Ordinances Terminated 36
12.6 No Third Party Beneficiaries 36
12.7 Written Notice 37
12.8 Franchise Ordinance Acceptance 37
12.9 Effective Date 38
EXHIBIT A. CUSTOMER SERVICE STANDARDS 39
EXHIBIT B. SAMPLE FRANCHISE FEE PAYMENT REPORT 42
Page iii
EXHIBIT C. SAMPLE PEG CAPITAL REPORT 43
Page iv
ORDINANCE NO. 2014-016
AN ORDINANCE granting a non-exclusive Franchise to Falcon Video Communications,
L.P. 1/k/a Charter Communications to operate and maintain a Cable Communications System
throughout the City of Yakima; setting forth provisions, terms and conditions of the grant of
Franchise; providing for City regulation and use of the Cable Communications System;
prescribing penalties for violation of Franchise provisions; and terminating Ordinance
No. 93-115.
BE IT ORDAINED BY THE CITY OF YAKI1v1A, herein "City" that a Franchise is
hereby granted to Falcon Video Communications, L.P. 1/k/a Charter Communications, herein
"Charter" to operate and maintain a Cable Communications System in the City of Yakima upon
the following express terms and conditions:
SECTION 1. DEFINITIONS. For the purposes of this Franchise Ordinance the
following terms, phrases, words, and their derivations shall have the meaning given herein.
When not inconsistent with the context, words used in the present tense include the future, words
in the plural number include the singular number, words in the singular number include the
plural number, and the use of any gender shall be applicable to all genders whenever the sense
requires. The words "shall" and "will" are mandatory and the word "may" is permissive. Where
a term in the Franchise Ordinance is not defined in this Section and there is a definition for the
term in the Cable Act, the Cable Act definition shall apply. Other terms in the Franchise
Ordinance which are not defined in this Section shall be given their common and ordinary
meaning.
1.1 "Affiliate" means another person who owns or controls, is owned by or controlled
by, or is under common ownership or control with, Charter.
1.2 "Applicable Law" means any local, State or federal statute, law, regulation, or
decision of a court of competent jurisdiction governing any of the matters addressed in this
Franchise Ordinance.
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1.3 "Basic Service" or "Basic Cable Service" means any service tier which
includes the retransmission of local television broadcast signals. Nothing in this definition shall
be deemed to limit the rights of Charter or the City with respect to the regulation of rates and
charges as permitted by applicable law.
1.4 "Cable Act" means the Cable Communications Policy Act of 1984 (Public Law
No. 98-549, 47 USC 521 (Supp.)) as amended by the Cable Television Consumer Protection and
Competition Act of 1992, as further amended by the Telecommunications Act of 1996 and as
further amended or superseded.
1.5 "Cable Communications System" or "Cable System" or "System" shall have
the meaning specified for "Cable Communications System" in the Cable Act. Unless otherwise
specified it shall in this document refer to the Cable Communications System constructed and
operated in the City under this Franchise Ordinance.
1.6 "Cable Service" means the one-way transmission of video programming or other
programming service to Subscribers, and Subscriber interactions, if any, which is required for the
selection or use of such video programming or other programming service.
1.7 "Channel" means a portion of the electromagnetic frequency spectrum which is
used in a Cable System and which is capable of delivering a television Channel (as television
Channel is defined by the FCC).
1.8 "Charter" shall mean Falcon Video Communications, L.P. 1/k/a Charter
Communications, and its agents, successors and assignees.
1.9 "City" shall mean City of Yakima of the State of Washington and all the
incorporated territory within its present and future boundaries.
Page 2
1.10 "FCC" means the Federal Communications Commission or any successor
agency.
1.11 "Franchise" or "Franchise Ordinance" shall mean the right granted by this
Franchise Ordinance and conditioned as set forth herein by which the City authorizes Charter to
erect, construct, reconstruct, operate, dismantle, test, use and maintain a Cable Communications
System in the City. The Franchise granted herein shall be a non-exclusive Franchise.
1.12 "Franchise Area" means the area within the jurisdictional boundaries of the City
including any areas annexed by City during the term of thiis Franchise.
1.13 "Franchise Fee" shall include any tax, fee, or assessment of any kind imposed by
the City on a cable operator or cable subscriber, or both,, solely because of their status as such.
The term Franchise Fee does not include (a) any tax, fee, or assessment of general applicability
(including any such tax, fee, or assessment imposed on both utilities and cable operators or their
services but not including a tax, fee or assessment which is unduly discriminatory against cable
operators or cable subscribers); (b) capital costs which are required by the Franchise to be
incurred by Charter for Public, Educational, or Governmental Access; (c) requirements or
charges incidental to the awarding or enforcing of the Franchise, including payments for bonds,
security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages; or
(d) any fee imposed under title 17, United States Code.
1.14 "Generally Accepted Accounting Principles" or "GAAP" means those
Generally Accepted Accounting Principles as promulgated and defined by the Financial
Accounting Standards Board (FASB), Emerging Issues Task Force (EITF), and/or the Securities
and Exchange Commission (SEC). Notwithstanding the foregoing, the City reserves its right to
challenge Charter's calculation of Gross Revenues, including the use or interpretation of GAAP
as promulgated and defined by the FASB, EITF and/or the SEC.
1.15 "Gross Revenues" means any and all revenue as determined in accordance with
Generally Accepted Accounting Principles ("GAAP") received by Charter from the operation of
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Charter's Cable System to provide Cable Services within the City, by Charter or by any affiliate
which is a cable operator and only to the extent such amounts are earned from the operation of
Charter's Cable System within the City to provide Cable Services. Gross Revenues shall include,
without limitation, amounts for the Basic Cable Service,, any other programming service tiers,
Pay Services, audio services, subscriber installations and transactions, Leased Access
programming fees, advertising, equipment rentals and all other revenues derived from the
operation of Charter's Cable System to provide Cable Services within the City. Charter shall
report to the City Gross Revenues as determined in accordance with GAAP. To the extent
revenues are received by Charter for the provision of a discounted bundle of services which
includes Cable Services and non-Cable Services, Charter shall calculate revenues to be included
in Gross Revenues using a methodology in accordance with GAAP. Currently, such
methodology allocates revenue on a pro rata basis when comparing the bundled service price and
its components to the sum of the most recent published rate card for the components, except it is
expressly understood that equipment may be subject to inclusion in the bundled price at full rate
card value. Gross Revenues which are not directly attributable to specific customers, such as
advertising revenue and home shopping commissions, shall be allocated to Systems and
jurisdictions on a per subscriber basis measured in a consistent manner from period to period.
Gross Revenues, however, shall not be double counted. Gross Revenues of both Charter and an
affiliate that represent a transfer of funds between Charter and the affiliated entity, and that
would otherwise constitute Gross Revenues of both Charter and the affiliate, shall be counted
only once for purposes of determining Gross Revenues. Similarly, operating expenses of Charter
which are payable from Charter's revenue to an affiliate and which may otherwise constitute
revenue of the affiliate, shall not constitute additional Gross Revenues for purposes of this
Franchise. Gross Revenues shall include amounts earned by an affiliate only to the extent that
Charter could, in concept, have earned such types of revenue in connection with the operation of
Charter's Cable System and recorded such types of revenue in its books and records directly but
for the existence of an affiliate. Gross Revenues shall not include sales or other similar taxes
imposed by law on subscribers which Charter is not obligated to collect, nor shall they include
unrecovered bad debt or credits, refunds and deposits paid to subscribers. Gross revenues shall
not include utility taxes collected from subscribers. Neither current nor previously paid Franchise
Page 4
Fees shall be subtracted from the Gross Revenue amount upon which Franchise Fees are
calculated and due for any period.
1.16 "Leased Access" shall mean the use on a fee-for-service basis of the Cable
System by business enterprises (whether profit, non-profit or governmental) to provide cable
programming to the citizens of the City pursuant to Section 612 of the Cable Act.
1.17 "Master Control Center" or "Control Center" means the facility operated by
the City to provide public and/or governmental access, including acquisition and maintenance of
equipment and facilities as necessary to create and develop PEG access programming and
included therein such personnel as may be required for the operation and maintenance of the
Master Control Center.
1.18 "Pay Service" or "Premium Service" means programming (such as
non -advertiser -supported movie Channels or pay-per-view programs) offered individually to
subscribers on a per -Channel, per -program or per -event basis.
1.19 "Person" means any individual, corporation, partnership, association, joint
venture or organization of any kind and the lawful trustee, successor, assignee, transferee or
personal representative thereof.
1.20 "Public, Educational or Government (PEG) Access Channel" means any
Channel or portion of a Channel designated pursuant to this Franchise for Public, Educational or
Governmental use by various agencies, institutions, organizations, groups and individuals,
including the City and its designated access providers, to acquire, create and distribute video
programming, not under Charter's editorial control, as permitted under Applicable Law.
1.21 "Street" shall mean the surface of and the space above and below the right of
way of any public street, road, highway, freeway, easement, lane, path, alley, court, sidewalk,
parkway, or driveway now or hereafter existing as such within all incorporated areas of the City.
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1.22 "Subscriber" means any Person who legally receives any one (1) or more of the
cable services provided by the Cable Communications System.
SECTION 2. FRANCHISE.
2.1 Grant of Franchise. The City hereby grants to Falcon Video Communications,
L.P. 1/k/a Charter Communications, a non-exclusive Franchise which authorizes Charter, subject
to the terms of this Franchise Ordinance, to construct, maintain, and operate a Cable System and
offer Cable Service and other services in, along, among, upon, across, above, over, under, or in
any matter connected with the Streets located in the City and for that purpose to erect, install,
construct, repair, replace, reconstruct, maintain, or retain in, on, over, under, upon, across or
along any Street or extensions thereof and additions thereto, such poles, wires, cables,
conductors, ducts, conduits, vaults, utility access covers, pedestals, amplifiers, appliances,
attachments, and other related property or equipment as may be necessary or appurtenant to the
Cable System. Said Franchise shall constitute a right to provide the services of a Cable
Communications System as required by the provisions of this Franchise Ordinance.
2.2 Franchise Term. The Franchise and the rights, privileges, and authority hereby
granted shall be for a term of ten (10) years commencing on the effective date of this Franchise
Ordinance as set forth in Section 12.9, unless extended in accordance with the provisions in
Section 2.7 or terminated sooner in accordance with this Franchise Ordinance.
2.3 Franchise Area. The Franchise Area shall be that area within the present or
future corporate limits of the City. Service shall be provided to all persons whose homes are
within the line extension policy set forth in Section 10 of this Franchise Ordinance and to such
further homes or businesses as agreed to by Charter.
2.4 Franchise Non-exclusive. The Franchise granted herein shall be non-exclusive.
The City specifically reserves the right to grant, at any time, such additional franchises for a
Cable Communications System as it deems appropriate provided, however, such additional
grants shall not operate to materially modify, revoke, or terminate any rights previously granted
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to Charter. The grant of any additional franchise shall not of itself be deemed to constitute a
modification, revocation, or termination of rights previously granted to Charter.
2.5 Franchise Required. No Cable System shall be allowed to occupy or use the
Streets of the Franchise Area or be allowed to operate without a franchise.
2.6 Equal Protection.
(a) City acknowledges and agrees that City may be required by federal law,
and reserves the right, to grant one (1) or more additional franchises to provide Cable Service
within the Franchise Area. If any additional competitive franchise is granted by City to provide
video programming in Charter's Franchise Area pursuant to the Cable Act, which franchise is for
an area where services have been extended by Charter and which contains material terms and
conditions that are more favorable or less burdensome than the terms or conditions of this
Franchise Ordinance, then, City agrees that it shall amend this Franchise to the mutual
satisfaction of City and Charter. The parties agree that this provision may not require a word for
word identical franchise or authorization for a competitive entity. The parties agree that,
notwithstanding any provision of this subsection, the City may not be obligated to comply with
the provisions of this subsection to the extent doing so would cause the City to violate applicable
laws or FCC rules. Video Programming services delivered over wireless broadband networks are
specifically exempted from the requirements of this Section so long as City does not have lawful
authority to regulate such wireless broadband networks within the Franchise Area.
(b) In the event that a competitive franchise is granted by City as described in
Section 2.6(a) above which contains material terms and conditions that are more favorable or
less burdensome than the terms of this Franchise, and notice thereof is duly provided to Charter
within a reasonable timeframe not to exceed twenty (20) days from execution, Charter shall
submit to City in writing (1) the basis for Charter's belief that certain provisions of its Franchise
place Charter at a competitive disadvantage; (2) the provisions of this Franchise to be amended;
and (3) specific language modifying any such Franchise provisions. City and Charter shall
negotiate in good faith such amendments to the Franchise within ninety (90) days, unless
otherwise agreed to by the parties. If the parties fail to reach agreement in informal negotiations,
either party may initiate mediation and the other agrees to participate in mediation in good faith.
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Each party shall bear its own cost for mediation. In the event the parties are not able to reach
agreement in informal negotiations or mediation, Charter may exercise its rights under
Subsection (c) below or Charter may choose to terminate this Franchise and take in its place the
same Franchise of a competing provider of video service authorized by the City.
(c) Charter's notice to City under this Subsection (c) shall be deemed to be
Charter's renewal notification pursuant to Section 626 of the Cable Act (47 U.S.C. §546).
Charter may elect at any time prior to the commencement of the Charter's thirty-six (36) month
renewal window provided by 47 U.S.C. §546 to file a written notice indicating an election to
shorten the term of this Franchise, and thereafter the tenn of Charter's Franchise shall, ninety
(90) days from Charter's written notice, be shortened so that the Franchise shall be deemed to
expire on a date thirty six (36) months from the first day of the month following the date of
Charter's notice. Charter shall immediately thereafter secure franchise renewal rights pursuant to
47 U.S.C. §546 with no further notice to the City required. City and Charter shall then enter into
proceedings consistent with 47 U.S.C. §546 for renewal of this Franchise. City and Charter shall
have all rights and obligations provided under 47 U.S.C. §546).
(d) If any other provider of cable services or video services (without regard to the
technology used to deliver such services) is lawfully authorized by any State or federal
governmental entity to provide such services using facilities located wholly or partly in the
public rights-of-way of the Grantor, Grantee has the right, to the extent it is lawful, to deem this
Franchise expired and to negotiate a replacement franchise, license, consent, certificate or other
authorization with any other appropriate governmental entity.
2.7 Franchise Renewal or New Franchise. The City may establish appropriate
requirements for new franchises or franchise renewals consistent with the provisions of
Section 626 of the Cable Act or any such successor statute as well as Applicable Law.
2.8 Periodic Public Review of Franchise and Franchise Modification. The field of
requirements and conditions applicable to the services authorized by this Franchise Ordinance
are rapidly changing. Therefore, in order to provide for a maximum degree of flexibility in this
Franchise Ordinance, and to help achieve a continued advanced and modern Cable System, the
following evaluation provision will apply.
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(a) During year five (5) of this franchise, and upon request of either party, a
public review may be held, should there be a material change to law, technology or services that
may have an effect on the terms and conditions of this Franchise Ordinance.
(b) As a result of a periodic review, either party may request a change or
amendment in the terms of this Franchise Ordinance. Parties will in good faith, review and
negotiate the terms of the change and any amendment required to this Franchise Ordinance.
Based on this review, and upon adoption of such a change or new requirement through a
mutually acceptable Franchise Ordinance Amendment, the change will become effective.
2.9 Sale or Transfer of Ownership Franchise.
(a) Charter shall not sell, transfer, lease, assign, sublet or dispose of, in whole
or in part, this Franchise Ordinance or Cable System or any of the rights or privileges granted by
this Franchise Ordinance, without the prior consent of the City upon notification from Charter to
City using the forms and procedures applicable pursuant to the Cable Act, rules of the FCC and
this Franchise Ordinance, which consent shall not be unreasonably denied or delayed and may be
denied only upon a good faith finding by the City that the proposed transferee lacks the legal,
technical, or financial qualifications to consummate the transaction and operate the Cable System
so as to perform its obligations under this Franchise Ordinance. This provision shall not apply to
sales of property or equipment in the normal course of business. Consent from the City shall not
be required for a transfer in trust, mortgage, or other instrument of hypothecation, in whole or in
part, to secure an indebtedness, or for a pro forma transfer to a corporation, partnership or other
entity controlling, controlled by or under common control with Charter.
2.10 Change in Control. Charter shall promptly notify the City through the City
Council of any proposed change in actual working control of the Cable System. Such change in
control shall be subject to Section 2.9, above.
2.11 Right to Purchase the System.
(a) The Parties will comply with 47 U.S.0 547.
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(b) In the event a franchise renewal is denied or terminated for any reason, the
City must allow Charter to abandon the facilities, or effect transfer to another purchaser
consistent with the franchise transfer provisions of this Franchise Ordinance.
2.12 Continuity of Service Mandatory. It shall be the right of all subscribers to
receive all available Cable Services insofar as their financial and other obligations to Charter are
honored. In the event that Charter elects to overbuild, rebuild, modify, or sell the System,
Charter shall make its best effort to ensure that all subscribers receive continuous uninterrupted
service, regardless of the circumstance. In the event of termination, purchase, lease -purchase,
condemnation, acquisition, taking over or holding of plant and equipment, sale, lease, or other
transfer to any other Person, including any other grantee of a cable communications franchise,
Charter shall cooperate fully to operate the Cable System in accordance with the terms and
conditions of this Franchise Ordinance for a temporary period sufficient in length to maintain
continuity of service to all subscribers.
2.13 Other Codes or Ordinances. Nothing in this Franchise Ordinance shall be
deemed to waive the requirements of the other lawful codes and ordinances of the City regarding
permits, fees to be paid or manner of construction, to the extent that the provisions of such codes
and ordinances do not have the effect of limiting the benefits or expanding the obligations of
Charter that are granted by this Franchise Ordinance. This Franchise Ordinance is a contract and
except as to those changes which are the result of the City's lawful exercise of its general police
power, the City may not take any unilateral action whichmaterially changes the explicit mutual
promises in this contract or conflict with Applicable Law. This Franchise Ordinance sets forth
the entire agreement between the parties respecting the subject matter thereof. Any changes to
this Franchise Ordinance must be made in writing signed by Charter and the City. In the event
of any conflict between this Franchise Ordinance and any City ordinance or regulation, this
Franchise Ordinance will prevail.
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SECTION 3. OPERATION IN STREETS AND RIGHTS-OF-WAY.
3.1 Use of Streets. Charter may, subject to the terms of this Franchise Ordinance,
erect, install, construct, repair, replace, reconstruct and retain in, on, over, under, upon, across
and along the Streets within the City such lines, cables, conductors, ducts, conduits, vaults, utility
access covers, amplifiers, appliances, pedestals, poles, attachments and other property and
equipment as are necessary and appurtenant to the operation of a Cable Communications System
within the City.
3.2 Construction orAlteration. Charter shall in all cases comply with all lawful
City ordinances and regulations regarding the acquisition of permits and such other items as may
be reasonably required in order to construct, alter or maintain the Cable System so long as they
are non-discriminatory and competitively neutral. Charter shall, upon request, provide
information to the City regarding its progress in altering the Cable System.
3.3 Compliance with Codes. All construction practices and installation of
equipment shall be done in accordance with all applicable sections of the National Electric
Safety Code and the National Electric Code.
3.4 Construction Standards. All of Charter's plant and equipment, including, but
not limited to, the antenna site head -end and distribution system, towers, house connections,
structures, poles, wire, cable, coaxial cable, fixtures and appurtenances shall be installed, located,
erected, constructed, reconstructed, replaced, removed, repaired, maintained and operated in
accordance with good engineering practices and performed by experienced maintenance and
construction personnel.
3.5 Safety. Charter shall, at all time, employ ordinary care and shall use commonly
accepted methods and devices preventing failures and accidents which are likely to cause
damage.
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3.6 Non -Interference. Charter shall exert its best efforts to construct and maintain a
Cable Communications System so as not to interfere with other use of Streets. Charter shall,
where possible in the case of above ground lines, make use of existing poles and other facilities
available to Charter. Charter shall individually notify all residents whose property will be
affected by proposed construction prior to commencement of that work where and when this is
reasonably possible.
3.7 Use of and Erection of Poles. Charter shall have the right to utilize existing
poles, conduits and other facilities whenever possible, ancl shall not construct or install any new,
different, or additional poles, conduits, or other facilities on public property without obtaining all
legally required permits of the City.
3.8 Consistency with Designated Use. Notwithstanding the above grant to use
Streets, no Street shall be used by Charter if the City determines, in a non-discriminatory and
competitively neutral manner, that such use is inconsistent with the terms, conditions or
provisions by which such Street was created or dedicated, or presently used under State and local
laws.
3.9 Undergrounding. The facilities of Charter shall be installed underground in
those service areas where existing telephone and electric services are both underground at the
time of system construction. In areas where either telephone or electric utility facilities are
installed aerially at the time of system construction, Charter may install its facilities aerially with
the understanding that at such time as the existing aerial facilities are required to be placed
underground by the City, Charter shall likewise place its facilities underground. In the event that
any telephone or electric utilities are reimbursed by the City or any agency thereof for the
placement of cable underground or the movement of cable, Charter shall be reimbursed upon the
same terms and conditions as any telephone, electric or other utilities unless City funding of such
costs have been furnished to the City from an outside source directing the purpose and use of
such funding, which cannot be used to reimburse Charter through no fault or neglect of the City.
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3.10 Open or Joint Trenching. In cases of new construction or property development
where utilities are to be placed underground, the City agrees to require as a condition of issuing a
permit for open trenching to any developer or property owner that such developer or property
owner give Charter at least thirty (30) days prior notice of such construction or development, and
of the particular dates on which open trenching will be available for Charter's installation of
conduit, pedestals and/or vaults, and laterals to be provided at Charter 's expense. Charter shall
also provide specifications as needed for trenching. Costs of trenching and easements required to
bring service to the development shall be borne by the developer or property owner; except that
if Charter fails to install its conduit, pedestals and/or vaults, and laterals within five (5) working
days of the date the trenches are available, as designated in the notice given by the developer or
property owner, then should the trenches be closed after the five (5) day period, the cost of new
trenching is to be borne by Charter.
3.11 Restoration. In case of disturbance by Charter of any Street, public way, paved
area or public improvement, Charter shall, at its own cost and expense and in accordance with
the requirements of local law, restore such Street, public way, paved area or public improvement
to substantially the same condition as existed before the work involving such disturbance took
place. Standards and conditions acceptable to the City shall be equally and uniformly applied to
Charter as to any other Person in the road rights-of-way and consistent with all applicable City
codes as they may apply to the City's Police Power.
With respect to Street restoration, Charter shall, at all times, employ ordinary care
and use commonly accepted methods and devices for preventing failures and accidents which are
likely to cause damage, injuries; or nuisances to the public, which may include but not be limited
to placing a temporary asphalt patch, installing a trench plate or making other temporary repairs
until the Street is restored. In the event that Charter, its contractors, or third parties should fail to
restore any City road right-of-way consistent with City codes and ordinances, City may, after
thirty (30) days' written notice, or such longer time provided by the City in the event weather or
other events beyond Charter's control prevent such restoration, make such repairs or restorations
as are necessary to return the City road rights-of-way to their pre -work condition, except if in the
opinion of the City, Charter's deficient restoration causes an emergency situation resulting in an
immediate hazard to public safety, health, or property, the City may repair the deficiency without
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prior notice to Charter. Charter shall be responsible for reimbursing the City for any and all
reasonable costs and expenses incurred by the City to correct any deficiency in Charter's
restoration of the Street, whether with notice as set out above or on an emergency basis. Upon
presentation of an itemized bill for repairs or restorations, including the costs of labor and
equipment, and an explanation of the basis for the City's determination that emergency
restoration action was required to remove an immediate hazard to public safety, health or
property, Charter shall pay the bill within sixty (60) days.
3.12 Access Through Private Property. Charter, with twenty-four (24) hour notice
to the property owner, shall have the authority to trim trees upon and overhanging Streets, alleys,
sidewalks, and public ways so as to prevent the branches of such trees from coming into contact
with the wires and cables of Charter.
3.13 Relocation.
(a) Charter shall, upon receipt of reasonable advance written notice, to be not
less than ten (10) business days, protect, support, temporarily disconnect, relocate, or remove any
of its property when lawfully required by the City pursuant to its police powers. Charter shall be
responsible for any costs associated with these obligations to the same extent all other users of
the City rights-of-way are responsible for the costs related to the relocation of their facilities.
(b) Charter shall, on the request of any Person holding a lawful permit issued
by the City, protect, support, raise, lower, temporarily disconnect, relocate in or remove from the
Street as necessary any of its property, provided that the expense of such is paid by any such
Person benefiting from the relocation and Charter is give reasonable advance written notice to
prepare for such changes. Charter may require such payment in advance. For purposes of this
subsection, "reasonable advance written notice" shall be no less than ten (10) business days in
the event of a temporary relocation and no less than one hundred twenty (120) days for a
permanent relocation.
(c) If funds are available to any Person using the Streets for the purpose of
defraying the cost of any of the foregoing, the City shall reimburse Charter in the same manner
unless City funding of such costs have been furnished to the City from an outside source
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directing the purpose and use of such funding, which cannot be used to reimburse Charter
through no fault or neglect of the City.
(d) Whenever, in case of fire or other disaster, it becomes necessary in the
judgment of the City to remove any of Charter's facilities, no charge shall be made by Charter
against the City for restoration and repair, unless such acts amount to gross negligence by the
City.
SECTION 4. SYSTEM DESIGN AND CAPACITY.
4.1 Availability of Signals and Equipment. Charter shall, commencing with the
effective date of the Franchise Ordinance, comply with FCC requirements regarding provision of
parental control technology to subscribers and at a reasonable charge.
4.2 Free Drops and Cable Service. Charter may provide, on a voluntary basis,
without charge one (1) cable drop, activated for Basic Cable Service to all elementary and
secondary public schools and public libraries within the: City and located within one hundred
twenty-five (125) feet of Charter's plant. Additionally, Charter shall provide, without charge, one
(1) activated outlet of Basic Cable Service at each of the following addresses, so that City may
view and monitor PEG Access Programming: City Hall at 129 North Second Street, Yakima,
WA 98901; Y -PAC at 124 S. 2nd Street, Yakima, WA 98901; and the Educational Access
facility at 106 S. 6th Ave, Yakima, WA, 98902. The locations identified above shall be within
one hundred and twenty-five (125) feet of Charter's feeder cable consistent with Section 10.1(b).
The Cable Service provided pursuant to this Section shall not be used for commercial purposes
and such outlets shall not be located in areas open to the public. The City shall take reasonable
precautions to prevent any inappropriate use of or loss or damage to Charter's Cable System. The
City shall not install other outlets or make any other alterations to the Cable System installed by
Charter.
4.3 Right of Inspection of Construction. The City shall have the right to inspect all
construction or installation work performed in the public Streets within the Franchise Area, and
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to make such tests as it shall find necessary to ensure compliance with the terms of this Franchise
Ordinance and other pertinent provisions of law, operating under its lawful police powers.
4.4 Emergency Alert Capability. Charter agrees at all times to comply with federal
and state EAS rules as required in 47 C.F.R. Part 11 or as amended. If Charter provides an
Emergency Alert System, then the City shall permit only appropriately trained and authorized
Persons to operate the EAS equipment and shall take reasonable precautions to prevent any use
of Charter's Cable System in any manner that results in inappropriate use thereof, or any loss or
damage to the Cable System. The City shall hold Charter, its employees, officers and assigns
harmless from any claims or costs arising out of use of the EAS, including, but not limited to,
reasonable attorneys' fees and costs.
4.5 Standby Power. Charter shall provide standby power at the Cable
Communications System head -end and at all hubs. Charter shall maintain standby power system
supplies, rated at least at two (2) hours duration, throughout the trunk and distribution networks.
In addition, Charter shall have in place throughout the Franchise term a plan, and all resources
necessary for implementation of the plan, for dealing with outages of more than two (2) hours.
This outage plan and evidence of requisite implementation resources shall be presented to the
City upon request with reasonable notice.
4.6 Technical Standards. The Federal Communications Commission (FCC) Rules
and Regulations, Part 76, Subpart K (Technical Standards), as now or hereafter constituted or
amended, shall apply. The City may establish reasonable technical standards for the
performance of the Cable System if the FCC permits it to do so.
4.7 Performance Testing. Charter shall perform all System tests at the intervals
required by the FCC, and all other tests reasonably necessary to determine compliance with
technical standards required by this Franchise Ordinance.
Written records of all System test results performed by or for Charter shall be
maintained for three (3) years, and shall be available for City inspection upon request.
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The City may observe Charter perform tests of the system for which Charter shall
give its cooperation. If more than one (1) of the locations tested fail to meet the performance
standards, Charter shall be required to indicate what corrective measures have been taken, and
the entire test shall be repeated at the locations which failed, and at least eight (8) additional
randomly chosen locations. If a second test results in failure of one (1) or more sites, then the
City may seek remedies in accordance with Sections 7.9 and 7.10 unless the circumstances of the
failure are caused by conditions which are beyond Charter's control, as determined,
acknowledged and verified by the City.
SECTION 5. PROGRAMMING AND SERVICES.
5.1 Categories of Programming Service. Charter shall carry broad categories of
video programming, including local news, sports, and entertainment.
5.2 Changes in Video Programming Services. Changes in video programming
shall be subject to federal law. Charter shall provide written notice to the City and to subscribers
of any proposed changes to programming services in compliance with 47 CFR Sec. 76.1603.
5.3 Obscenity. Subject to applicable federal law, Charter shall not knowingly
transmit over the Cable System programming which is obscene or otherwise unprotected by the
Constitution of the United States, provided, however, Charter shall in no way be responsible for
programming over which it has no editorial control, including Public, Educational and
Governmental access programming.
SECTION 6. PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS.
6.1 PEG Access Channels. As of the Effective date of this Franchise Ordinance,
Charter shall continue to make available four (4) standard video Channels on the System for
Public, Educational and/or Governmental (PEG) access purposes.
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(a) All PEG access channels may be delivered by City or its designee to
Charter in standard digital format. Charter is only obligated to provide the PEG signal to its
Subscribers in the quality in which it receives it from the City.
(b) The City or its designee will utilize PEG Channels authorized by this
Franchise for locally scheduled original programming not less than 70% of the time, seven (7)
days a week, for any consecutive eight (8) hour block during the hours of 6:00 am to 11:00 pm,
as measured on an annual basis. For the purposes of this Section, "locally scheduled original
programming" means programming produced or provided by any local resident, the City, its
designee, any public or private entity that provides services to residents of the City, any
transmission of a meeting or proceeding of any local, state, or federal governmental entity, any
transmission of educational or instructional programming provided by an accredited educational
institution, and includes the first showing of a program and three (3) repeat showings. The City
or its designee will keep records of the amount of locally scheduled original programming on
PEG Channels authorized by this Franchise and will provide a report of same to Charter by
request, but not more often than once each year. If Charter believes the PEG Channel utilization
criteria described in this Section is not being met on one (1) or more PEG Channels authorized
by this Franchise, Charter may provide the City with ninety (90) days written notice of its intent
to utilize the PEG Channel(s), at its own discretion, that it believes is (are) not meeting said
criteria. If the City is not able to demonstrate to Charter within ninety (90) days of receiving said
notice that the PEG Channel utilization criteria described in this Section is being met on the PEG
Channel(s) identified in the notice, Charter may, at its own discretion, utilize the PEG Channel(s)
identified in the notice. If the City can demonstrate at any point within the term of this Franchise
that the PEG Charnel utilization criteria described in this Section can be met on the PEG
Channel(s) identified in the notice described in this Section, Charter, upon ninety (90) days
written notice from the City, will reallocate said channel(s) for utilization by the City or its
designee for locally scheduled original programming.
6.2 Management and Control of PEG Access Programming. The City, except as
otherwise designated by the City, shall control and manage the use of any and all PEG Access
Programming. The City and/or its designee(s) may formulate rules for the operation of the
Public, Educational and Government Access Programming, consistent with this Franchise and
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Applicable Law. Such rules shall not be designed to control the content of PEG access
programming.
(a) Subject to Section 6.1, Charter shall not cause any programming to
override PEG programming on any PEG Access Channel, except by oral or written permission
from the City, with the exception of Emergency Alert System signals.
(b) The City shall not allow commercial use or lease of PEG Access Channels
or any use whatsoever that may generate revenue for the City or any other Person or compete
with any services provided by Charter without the expressed written permission of Charter.
6.3 Location of PEG Channels. All PEG Channels required under this Franchise
shall be carried by Charter on the lowest tier in a manner consistent with Applicable Law.
(a) Charter shall make every reasonable effort to coordinate the cablecasting
of Public, Educational and/or Governmental access programming upon the Cable Television
System at the same time and upon the same Channel designations as such programming is
currently cablecast within the community.
(b) Charter shall not encrypt the PEG Channels any differently than other
commercial and PBS Channels available on the Cable System.
(c) Charter shall provide the City with a minimum of sixty (60) days notice,
and use its best efforts to provide ninety (90) days notice, prior to the time Public, Educational,
and/or Governmental Access Channel numbers are changed. Charter shall consult with City prior
to making a final determination in its sole discretion regarding any changes in PEG Access
Channel numbers. Any new Channel numbers for the Public, Educational and/or Governmental
Access Channels provided pursuant to this Franchise shall be in full compliance with FCC signal
quality and proof of performance standards.
6.4 Digital Channels After Digital Transition. At such time as Charter no longer
offers Basic Service in an analog format, Charter shall continue to provide activated downstream
Channels for PEG access use in a standard digital format. Charter shall carry standard
components of the standard definition access Channel signals provided by the City and/or its
designee(s) including, but not limited to, closed captioning and stereo audio. The City and/or its
designee(s) shall be responsible for providing the access Channel signal in a standard definition
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format from the demarcation point at the City to Charter's headend. With respect to signal
quality, Charter shall not be required to carry a PEG Access Channel in a higher quality format
than that of the Channel signal delivered to Charter, but Charter shall distribute the access
Channel signal without degradation.
6.5 Interconnection of PEG Access Channels. Upon request by the City, and based
on a demonstrated need, Charter shall work in good faith with the City to interconnect with other
cable operators at a designated meet point and not at Charter's headend or hubs in order to hand
off PEG Access Channel signals for the purposes of sharing PEG programming throughout the
Franchise Area. Such interconnection shall preserve the technical quality of the PEG Access
Channels without degradation to Charter's demarcationat the designated meet point of the
interconnect.
The City shall not require such interconnection without the prior consent of
Charter, which shall not be unreasonably withheld. Charter shall not be obligated to interconnect
with any cable operator providing competitive Cable Services within the Franchise Area. Any
incremental, direct capital costs incurred by Charter to interconnect shall be paid by the City.
6.6 Technical Quality of PEG Access Channels.
(a) Charter shall maintain, without charge to the City, its system in
accordance with FCC technical standards so that PEG programming signals and interconnections
of PEG programming signals are at the same level of technical quality and reliability as other
commercial and broadcast programming signals carried by Charter, so long as the programming
signal comes to Charter at the level of quality. There shall be no significant deterioration in
signal from the point of origination upstream to the point of reception downstream.
(b) Within twenty-four (24) hours of a request from the City to Charter
identifying a technical problem and requesting assistance, Charter will make every effort to
provide technical assistance or diagnostic services to determine whether or not a problem with a
PEG signal is the result of matters for which Charter is responsible, and, if so, Charter will make
every effort to take prompt corrective action. If the problem persists and there is a dispute about
the cause, then the parties shall meet with engineering representation from Charter and the City
in order to determine the course of action to remedy the problem.
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6.7 Change in Technology. In the event Charter makes any change in the Cable
System and related equipment and facilities or in Charter's signal delivery technology which
directly or indirectly substantially affects the signal quality or transmission of PEG
programming, Charter shall notify the City in writing, at least thirty (30) days in advance.
6.8 Support for PEG Access Channels. To help meet the City's PEG access needs
over the term of the Franchise, Charter shall provide the following:
(a) Charter shall pay to the City as capital support for access equipment,
replacement and facilities fifty cents (500) per Subscriber per month, during the ten (10) year
term payable quarterly, within forty-five (45) days of the close of each calendar quarter and
transmitted by electronic funds transfer to a bank account designated by the City.
(b) The City will establish an account in special revenue for any PEG access
capital contributions from Charter which shall be used for PEG access capital funding.
(c) Should Charter continue to provide Cable Service after the scheduled
expiration of the Franchise, until and unless this Franchise is superseded by a renewed Franchise
in accordance with Applicable Law, Charter shall continue to make quarterly capital support
payments for, and in support of PEG access equipment, replacement and facilities as specified
hereinabove.
(d) The capital funds used for PEG programming required by the Franchise
shall be used in accordance with 47 U.S.C. § 542(g).
(e) The City recognizes that the capital support for PEG programming
required above represent obligations, created under the terms of the Franchise. To the extent
provided for in federal law, such costs and fees paid by Charter may be passed through to
subscribers and itemized on subscriber bills.
6.9 Annual Report to Grantee. Upon request, the City agrees to provide Charter
with a written report detailing annual PEG capital expenditures, which report shall be due to
Charter within ninety (90) days after request. (Sample report is attached as Exhibit C.)
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SECTION 7. REGULATORY PROVISIONS.
7.1 Intent. The City shall have the right to administer and regulate activities under
the Franchise up to the full extent permitted by Applicable Law.
7.2 Delegation of Authority to Regulate. The City reserves the right to delegate its
regulatory authority wholly or in part to the federal government and/or to agents of the City,
including, but not limited to, an agency which may be formed to regulate several City franchises.
However, the City recognizes that the City, not its delegates, are responsible for abiding by the
conditions set forth in this agreement and such delegation does not affect Charter's rights under
law or this agreement.
7.3 Areas of Administrative Authority. In addition to reserving its right to exercise
all regulatory authority concerning the Franchise, the City shall have the right to exercise
administrative authority in areas including but not limited to the following:
(a) Administering and enforcing the provisions of this Franchise Ordinance
pursuant to Section 2.13, including the adoption of administrative rules and regulations to carry
out this responsibility.
(b) Coordination of the operation of Public, Governmental and Educational
Channels.
7.4 Right to Regulate. The City expressly reserves the right to regulate Charter's
rates and charges in accordance with Applicable Law as such law may provide during the term of
the Franchise.
7.5 Notice of Change in Rates and Charges. Throughout the term of the Franchise,
Charter shall give the City and all subscribers within the City at least thirty (30) days notice of
any intended modifications or additions to subscriber rates or charges consistent with 47 CFR
Sec. 76.1603. Nothing in this Subsection shall be construed to prohibit the reduction or waiving
of rates or charges in conjunction with promotional campaigns for the purpose of attracting
subscribers or users.
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7.6 Rate Discrimination Prohibited. Within any category of subscribers, Charter
shall not discriminate among subscribers with regard to rates and charges made for any service
based on considerations of race, color, creed, sex, marital or economic status, national origin,
sexual preference, or neighborhood of residence, except as otherwise provided herein; and for
purposes of setting rates and charges, no categorization of subscribers shall be made by Charter
on the basis of those considerations. Nevertheless, Charter shall be permitted to establish
discounted rates and charges for providing Cable Service to low-income handicapped or
low-income elderly subscribers.
7.7 Privacy. Charter shall fully comply with the privacy rights of Subscribers as
contained in Cable Act Section 631 (47 U.S.C. § 551) and any other applicable federal or State
laws.
7.8 Remedies for Franchise Violations. The City, subject to applicable provisions
of this Franchise Ordinance and as described in this Section 7, has the right to assert the
following remedies in the event Charter violates any provision of this Franchise Ordinance:
(a) Commence an action at law for monetary damages or seek other equitable
relief.
(b) In the case of a substantial default of a material provision of this Franchise
Ordinance, declare the Franchise to be revoked, consistent with the procedures in Section 7.11.
(c) Require Charter to correct or otherwise remedy the violation prior to
considering the approval of any proposed rate increase if rate regulation is authorized by law and
is in effect.
(d) Seek specific performance of any provision, which reasonably lends itself
to such remedy, as an alternative to damages.
In determining which remedy or remedies for Charter's violation are appropriate,
the City shall take into consideration the nature and extent of the violation, the remedy needed to
prevent such violations in the future, whether Charter has a history of previous violations of the
same or similar kind, and such other considerations as are appropriate under the circumstances.
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7.9 Procedure for Remedying Franchise Violations.
(a) In the event that the City believes that Charter has not complied with the
terms of this Franchise Ordinance, the City shall notify Charter in writing of the exact nature of
the alleged noncompliance.
(b) Charter shall have thirty (30) days from the receipt of notice described
above to (a) respond to the City contesting the assertion of noncompliance, or (b) to cure such
default or, in the event that by the nature of the default such default cannot be cured within the
thirty (30) day period, initiate reasonable steps to remedy such default and notify the City of the
steps being taken and the projected date they will be completed.
(c) In the event that Charter fails to respond to the notice described herein or
cure the default pursuant to the procedures set forth above, the City shall schedule a public
hearing to investigate the default. The City shall give Charter twenty (20) calendar days notice
of the time and place of the hearing and provide Charter with an opportunity to be heard. Charter
shall have the right to present evidence and to question witnesses. The City shall determine if
Charter has committed a violation and shall make written findings of fact relative to its
determination. If a violation is found, Charter may petition for de novo reconsideration before
any competent tribunal having jurisdiction over such matters.
7.10 Minor Violations. Furthermore, the parties hereby agree that it is not the City's
intention to subject Charter to penalties, fine, forfeitures or revocation of the Franchise
Ordinance for violations of the Franchise Ordinance where the violation was a good faith error
that resulted in no or minimal negative impact on the Subscribers within the City, or where strict
performance would result in practical difficulties and hardship to Charter which outweighs the
benefit to be derived by the City and/or Subscribers.
7.11 Revocation. In addition to any rights set out elsewhere in this document, the City
reserves the right to declare a forfeiture or otherwise revoke the Franchise, and all rights and
privileges pertaining thereto, in the event that:
(a) Charter is in substantial violation of any material provision of the
Franchise and fails to correct the violation after written notice of the violation and proposed
Page 24
forfeiture and a reasonable opportunity thereafter to correct the violation as noted in Section 7.9,
Procedure for Remedying Franchise Violations.
(b) Charter is found by a federal or state court to have engaged in any actual
or attempted fraud or deceit upon the City, Persons or subscribers.
(c) Charter fails to obtain and maintain any material permit required by any
federal or state regulatory body, relating to the construction, maintenance and operation of the
System.
Upon the occurrence of one (1) of the events set out above, following sixty (60) days
written notice to Charter of the occurrence and the proposed forfeiture and an opportunity for
Charter to be heard, the City may by Ordinance or other appropriate document, declare a
forfeiture. In a hearing of Charter, Charter shall be afforded due process rights as if the hearing
were a contested case hearing subject to Washington law, including the right to cross-examine
witnesses and to require that all testimony be on the record. Findings from the hearing shall be
written, and shall stipulate the reasons for the City's decision. If a forfeiture is lawfully declared,
all rights of Charter under this Franchise Ordinance shall immediately be divested without a
further act upon the part of the City, subject to a de novo appeal to a court of law.
7.12 Right to Require Removal of Property. Upon the termination of the Franchise,
as provided for by this Franchise Ordinance, the City shall have the right to require Charter to
remove, at Charter's own expense, all or any part of the Cable Communications System from all
Streets and public ways within the Franchise Area, where the abandoned facilities interfere with
reasonable uses of the rights-of-way. If Charter fails to do so, the City may perform the work
and collect the cost thereof from Charter. The actual cost thereof, including direct and indirect
administrative costs, shall be a lien upon all plant and property of Charter effective upon filing of
the lien with the Yakima County Auditor. This section shall not apply in cases where Charter
opts to sell or transfer the System pursuant to Section 2.9.
Any order by the City Council to remove cable or conduit shall be mailed to
Charter not later than thirty (30) calendar days following the date of termination of the Franchise.
Charter shall file written notice with the Clerk of the City Council not later than thirty (30)
calendar days following receipt of the Council's order of its intention to remove cable and a
schedule for removal by location. The schedule and timing of removal shall be subject to
Page 25
approval and regulation by the City. Removal shall be completed not later than twelve (12)
months following the date of termination of the Franchise.
Charter shall not remove any underground cable or conduit which requires
trenching or other opening of the Streets along the extension of cable to be removed, except as
hereinafter provided. Charter may voluntarily remove any underground cable from the Streets
which has been installed in such a manner that it can be removed without trenching or other
opening of the Streets along the extension of cable to be removed. Subject to Applicable Law,
Charter shall remove, at its sole cost and expense, any underground cable or conduit by trenching
or opening of the Streets along the extension thereof or otherwise which is ordered to be
removed by the City Council based upon a determination, in the sole discretion of said Council,
that removal is required in order to eliminate or preventa hazardous condition. Underground
cable and conduit in the Streets which is not removed shall be deemed abandoned.
7.13 Enforcement. In the event the City, after such hearing, determines that Charter is
in default of any provision of this Franchise Ordinance, the City may impose any of the remedies
set out in Section 7.8 herein.
7.14 Failure to Enforce. Charter shall not be relieved of any of its obligations to
comply promptly with any provision of this Franchise Ordinance by reason of any failure of the
City to enforce prompt compliance, and the City's failure to enforce shall not constitute a waiver
of rights or acquiescence in Charter's conduct.
7.15 Force Majeure. Charter shall not be held in default or noncompliance with the
provisions of the Franchise, nor suffer any enforcement or penalty relating thereto, where such
non-compliance or alleged defaults are caused by circumstances reasonably beyond the ability of
Charter to anticipate and control. This provision includes, but is not limited to, severe or unusual
weather conditions, fire, flood, or other acts of God, strikes, work delays caused by failure of
utility providers to service, maintain or monitor their utility poles to which Charter's Cable
System is attached, as well as unavailability of materials and/or qualified labor to perform the
work necessary.
Page 26
7.16 Alternative Remedies. No provision of this Franchise Ordinance, including
remedies identified in this Franchise Ordinance, shall be deemed to bar the right of either party
to seek or obtain judicial relief from a violation of any provision of the Franchise Ordinance or
any rule, regulation, requirement or directive promulgated thereunder.
7.17 Compliance with the Laws. Charter shall comply with all federal and state laws
and regulations, including regulations of any administrative agency thereof, as well as all general
ordinances, resolutions, rules and regulations of the City heretofore or hereafter adopted or
established during the entire term of the Franchise as long as they are lawful expressions of the
City's police powers and subject to Section 2.13. Nothing in this Franchise Ordinance shall limit
or expand the City's right of eminent domain under state law. Nothing in this Franchise
Ordinance shall be deemed to waive the requirements of any lawful code or resolution of the
City regarding permits, fees to be paid or manner of construction as long as they are generally
applicable to all users of the City's rights-of-way in a non-discriminatory and competitively
neutral manner and subject to federal and State law.
SECTION 8. REPORTING REQUIREMENTS.
8.1 Annual Report. Upon request, but no more than once per year, Charter shall
present a written report to the City which shall include:
(a) A summary of the previous year's activities for the Franchise Area,
including, but not limited to, the total number of subscribers for each category of service, the
number of homes passed, other System facilities and equipment constructed, any services added
or dropped, and any technological changes occurring in the System.
(b) A summary of complaints received, with a summary of how the
complaints have been dealt with.
(c) If City does not request the reports described in this Section, Charter shall
maintain the information necessary to produce such reports for inspection by City, upon
reasonable notice, for a period of not less than twenty-four (24) months.
Page 27
8.2 Monitoring and Compliance Reports. Upon request, but no more than once a
year, Charter shall provide a written report of any and all FCC technical performance tests for
the residential network required in FCC Rules and Regulations as now or hereinafter constituted.
In addition, and based on request from City, Charter shall provide reports of the semi-annual test
and compliance procedures established by this Franchise Ordinance, no later than thirty (30)
days after the completion of each series of tests.
8.3 Public Disclosure. The City agrees to treat any information disclosed by Charter
as confidential to the maximum extent permissible under RCW Chapter 42.56, Public Records
Act, and only to disclose it to employees, representatives, and agents thereof that have a need to
know, or in order to enforce the provisions hereof. If the City believes it must release any such
confidential books or records in the course of enforcing this Franchise, and based on the laws of
the State of Washington, or for any other reason, it shall advise Charter in advance so that
Charter may take appropriate steps to protect its interests. Charter shall not be required to
provide Subscriber information in violation of Section 631 of the Cable Act.
8.4 Communications with Regulatory Agencies. Upon request, a copy of responses
or any other communications from the FCC or any other federal or state regulatory commission
or agency to Charter or any affiliate pertaining to the Cable System in City shall be provided to
the City. In addition, upon request Charter and its affiliates shall provide a copy to the City of
any communication to or from any judicial or regulatory agency regarding any alleged or actual
violation of a law, regulation or other requirement relating to the Cable System in the City.
SECTION 9. CUSTOMER SERVICE POLICIES.
9.1 Customer Service Standards. Charter shall comply with the customer service
standards set forth in 47 C.F.R. § 76.309 of the Federal Communications Commission's Rules
and Regulations (FCC customer service standards are attached hereto as Exhibit A), as such may
be amended from time to time and as described in Section 9 of this Franchise Ordinance. In
addition, the City reserves the right to establish additional specific customer service and
Page 28
consumer protection standards, by separate Ordinance, as allowed by federal law or FCC
regulation.
9.2 Customer Service Agreement and Manual. Charter shall provide to
subscribers a welcome kit for use in establishing subscriber service. A copy of the welcome kit
shall be provided to each subscriber at the time of initial and any re -connection hookup, and at
any time the kit is requested by the subscriber. These requirements may be satisfied by posting
these documents on Charter's website. Charter shall provide said welcome kit to a subscriber(s)
in written form if requested to do so by a subscriber(s).
9.3 Subscriber Billings. Charter shall cause to have printed clearly on each cable bill
the telephone number and address of the office designated by the City, for handling unresolved
complaints about Cable Service.
SECTION 10. LINE EXTENSION POLICY.
10.1 Standard Installation. Charter shall make service available, within sixty (60)
days and at standard installation rates and standard service rates, for every potential subscriber:
(a) Whose dwelling is one (1) of a minimum of thirty (30) dwelling units per
linear cable mile from the nearest existing cable plant; and
(b) Where connection to the potential subscriber's dwelling from cable plant
constructed as required under this Franchise Ordinance requires no more than a one hundred and
twenty-five (125) foot aerial drop cable.
10.2 Isolated Areas. Potential subscribers within the Franchise Area requesting
service but requiring service extended beyond the standard installation and service provisions
under Section 10.1 shall be provided the first one hundred and twenty-five (125) feet of aerial
cable at the prevailing installation rate. Cable and service required for a non-standard
installation will be provided under the following circumstances:
Page 29
(a) Where the potential subscriber, or any group including the potential
subscriber, pays in advance the direct and incremental cost of extending the line and making the
installation; or
(b) Where the potential subscriber and Charter reach an independent
agreement for the provision of service, so long as the agreement does violate any other
requirements and standards of this Franchise Ordinance.
10.3 Annexation. In the event the City modifies the Franchise Area by annexation or
any other means, the City shall provide at least sixty (60) day prior notice to Charter. The City
shall also notify Charter of all new Street address assignments or changes within the Franchise
Area. Said notice shall be in writing to the address set forth below by U.S. certified mail, return
receipt requested. The City shall provide address files and maps in sufficient detail and in an
acceptable digital format. Charter shall begin to collect Franchise Fees from Subscribers in any
annexed area within one hundred and twenty (120) days of such notice and address information
as described above. Charter shall not be obligated to collect and remit Franchise Fees until such
notice and information has been received by Charter.
All notices provided under this subsection shall be delivered in accordance with
Section 12.7 of this Franchise Ordinance.
Charter shall provide the City written notice of address changes affecting this subsection
pursuant to Section 12.7.
SECTION 11. COMPENSATION AND FINANCIAL PROVISIONS.
11.1 Franchise Fees. During the term of the Franchise, Charter shall pay to the City
an amount equal to five percent (5%) of Charter's annual Gross Revenues as a Franchise Fee.
(a) Franchise Fees shall be calculated annually and transmitted quarterly by
electronic funds transfer to such City of Yakima bank account as designated by the director of
finance and budget, to be received not later than the forty-fifth (45th) of each quarter for the
preceding calendar quarter. Within thirty (30) days after the payment, Charter shall file with the
City a written statement which identifies in detail the sources and amounts of Gross Revenues
earned by Charter during the quarter for which payment is made (Franchise Fee Payment Report
Page 30
is attached hereto as Exhibit B). No acceptance of any payment shall be construed as an accord
that the amount paid is, in fact, the correct amount, nor shall such acceptance of payment be
construed as a release of any claim which the City may have for further or additional sums
payable under the provisions of this Section.
(b) If any Franchise payment or recomputed payment is not made on or before
the dates specified herein, Charter shall pay an interest charge, computed from the last day of the
fiscal year in which payment was due, at the annual rate of one percent (1%) over the prime
interest rate.
(c) Throughout the term of the Franchise, including any extensions that may
be granted, the City will dedicate all Franchise Fee revenue for allocation to expenditures
directly related to costs associated with operation of the City's Master Control Center and/or the
provision of Community Relations services, Communications services, and other public
information services.
11.2 Inspection of Records. Charter shall permit any duly authorized representative
of the City, upon receipt of advance written notice, to examine during normal business hours and
on a non -disruptive basis any and all records that are legally permissible for release and that are
reasonably necessary to ensure Charter's compliance with the Franchise. Such notice shall
specifically reference the subsection of the Franchise that is under review so that Charter may
organize the necessary books and records for access by the City. Charter shall make any records
requested by the City available for inspection at Charter's office closest in proximity to City, if
possible. Charter shall not be required to maintain any books and records for Franchise
compliance purposes longer than two (2) years, except for service complaints, which shall be
kept for one (1) year. Charter shall not be required to provide Subscriber information in
violation of Section 631 of the Cable Act. The City is a public agency and is subject to the
Washington State Public Records Act, Chapter 42.56. RCW ("PRA"), as existing or hereafter
amended. To the extent authorized by the PRA, the City agrees to treat as confidential any
books, records or maps that constitute proprietary or confidential information to the extent
Charter makes the City aware of such confidentiality. If the City believes it must release any
such confidential books or records in the course of enforcing this Franchise, to comply with the
PRA, or for any other reason, it shall advise Charter in advance so that Charter may take
Page 31
appropriate steps to protect its interests. Until otherwise ordered by a court or agency of
competent jurisdiction, the City agrees that, to the extent permitted by State and Federal law, it
shall deny access to any of Charter's books and records marked confidential, as set forth above,
to any Person. The City, its agents, employees, representatives or any other Person who has
access to records provided by Charter shall sign Charter's nondisclosure agreement prior to
records review.
11.3 Insurance.
(a) Coverages. Charter shall maintain, throughout the term of this Franchise,
liability insurance insuring Charter, its officers, employees and agents, with regard to claims and
damages, in the minimum amounts as follows:
(1) Commercial Liability Insurance. Charter shall provide the City
with a certificate of insurance as proof of commercial liability insurance with a minimum
liability limit of One Million Dollars ($1,000,000) combined single limit bodily injury and
property damage per occurrence and Two Million Dollars ($2,000,000) in the aggregate. Said
certificate of insurance shall clearly state who the provider is, the amount of coverage, the policy
number and when the policy and provisions provided are in effect and that the insurer will
endeavor to provide advance written notice of cancellation except in the case of non-payment of
premium. Notice of cancellation to the certificate holder may be made by any commercially
reasonable means, including mail, electronic mail, or facsimile transmission to the contact name
and email provided by the City. It is the responsibility of the City to provide Charter with up-to-
date contact names and email addresses. Said insurance shall be in effect for the duration of this
Franchise Ordinance. The policy shall name the City, its elected officials, officers, agents and
employees as additional insureds. The insurance shall be with an insurance company authorized
to conduct business in the State of Washington; provided that Charter may obtain the insurance
required in this Section through any combination of self-insurance (through the utility insurance
pool and provided that such self-insurance is in compliance with state regulations), primary and
excess or umbrella liability insurance. If Charter uses any contractors and/or subcontractors to
perform any of the work referenced in this Franchise, such contractors and/or subcontractors
shall maintain the minimum limits of liability and comply with all insurance requirements in
Page 32
effect at the time such work is performed as established by applicable City law, rule or
regulation.
(2) Business Automobile Liability Insurance. Charter shall provide
the City with a certificate of insurance as proof of business automobile insurance with a
minimum liability limit of One Million Dollars ($1,000,000) combined single limit bodily injury
and property damage. Said certificate of insurance shall clearly state who the provider is, the
amount of coverage, the policy number and when the policy and provisions provided are in effect
and the insurer will endeavor to provide advance written notice of cancellation except in the case
of non-payment of premium. Notice of cancellation to the certificate holder may be made by any
commercially reasonable means, including mail, electronic mail, or facsimile transmission to the
contact name and email address provided by the City. It is the responsibility of the City to
provide Charter with up-to-date contact names and email addresses. Said insurance shall be in
effect for the duration of this Franchise. The policy shall name the City, its elected officials,
officers, agents and employees as additional insureds. The insurance shall be with an insurance
company or companies authorized to conduct business in the State of Washington; provided that
Charter may obtain the insurance required in this Section through any combination of self-
insurance (through the utility insurance pool and provided that such self-insurance is in
compliance with state regulations), primary and excess or umbrella liability insurance. If Charter
uses any contractors and/or subcontractors to perform any of the work referenced in this
Franchise, such contractors and/or subcontractors shall maintain the minimum limits of liability
and comply with all insurance requirements in effect at the time such work is performed as
established by applicable City law, rule or regulation.
(3) Umbrella Liability Insurance. Charter shall maintain umbrella
liability insurance coverage, in an occurrence form, over underlying commercial liability and
automobile liability. Charter shall provide the City with a certificate of insurance as proof of
umbrella coverage with a minimum liability limit of Five Million Dollars ($5,000,000). The
insurance shall be with an insurance company or companies authorized to conduct business in
the State of Washington; provided that Charter may obtain the insurance required in this Section
through any combination of self-insurance (through the utility insurance pool and provided that
such self-insurance is in compliance with state regulations), primary and excess or umbrella
liability insurance.
Page 33
(4) Professional Liability Insurance. Charter shall provide the City
with a certificate of insurance as evidence of Professional Liability Insurance with coverage of at
least One Million Dollars ($1,000,000.00) claims made and an annual aggregate limit of at least
One Million Dollars ($1,000,000.00). The certificate shall clearly state who the provider is, the
amount of coverage, the policy number, and when the policy and provisions provided are in
effect. The insurance shall be with an insurance company or companies authorized to conduct
business in the State of Washington. If the policy is on a claims made basis, the retroactive date
of the insurance policy shall be on or before the inception date of the Franchise. The insurance
coverage shall remain in effect during the term of this Franchise and for a minimum of three (3)
years following the termination of this Franchise.
Providing coverage in the amounts as set forth above shall not be construed to relieve
Charter from liability in excess of those limits.
11.4 Waiver, Indemnity, No Estoppel, No Duty.
(a) Charter hereby waives all claims, direct or indirect, for loss or liability
against the City arising out of Charter's franchised or permitted operations; provided, however,
such indemnification shall not extend to that portion of any claims, liability, expense of any
nature whatsoever including all costs and attorneys' fees caused by or arising directly or
indirectly from or out of the negligence or willful misconduct of the City, its agents, employees,
officers, contractors, or subcontractors.
(b) Charter shall, at its sole expense, protect, defend, indemnify and hold
harmless the City, its elected officials, and in their capacity as such, the officials, agents, officers
and employees of the City from any and all claims, lawsuits, demands, actions, accidents,
damages, losses, liens, liabilities, penalties, fines, judgments, awards, costs and expenses arising
directly or indirectly from or out of, relating to or in any way connected with the performance or
non-performance, by reason of any intentional or negligent act, occurrence or omission of
Charter, whether singularly or jointly with others, its representatives, permittees, employees,
contractors or subcontractors, whether or not such acts or omissions were authorized or
contemplated by this Franchise or Applicable Law, arising from the construction, installation,
maintenance, operation, alteration or modification of the Cable Communications System or
arising from actual or alleged injury to persons or property, including the loss of use of property
Page 34
due to an occurrence, whether or not such property is physically damaged or destroyed, provided
that the City shall give Charter written notice of its obligation to indemnify the City within ten
(10) days of receipt of a claim or action pursuant to this Section. In the event any such claim
arises, the City shall tender the defense thereof to Charter and Charter shall have the right to
defend, settle or compromise any claims arising hereunder and the City shall cooperate fully
herein. If the City determined in good faith that its interests cannot be represented by Charter,
Charter shall be excused from any obligation to represent the City. Notwithstanding the
foregoing, Charter shall not be obligated to indemnify the City for any damages, liability or
claims resulting from the willful misconduct or negligence of the City or for the City's use of the
Cable System, including any PEG Channels
(c) Whenever any judgment is recovered against the City or any other
indemnitee for any such liability, costs, or expenses, such judgment shall be conclusive against
Charter, not only as to the amount of such damage, but as to its liability, provided Charter has
reasonable notice or actually knew, or should have known, of the pendency of such suit. Under
such circumstances, Charter may also request the opportunity to defend or participate in the suit
with legal counsel of its choice, at its expense, said request not to be unreasonably denied.
(d) No action, error or omission, or failure to act by the City, its agents,
officers, officials or employees, in connection with administering its rights, duties or regulatory
functions related to this Franchise shall be asserted by Charter, directly, indirectly or by way of
seeking indemnification or as an assertion that the City has waived or is estopped to assert any
municipal right hereunder, against the City, its boards, departments, divisions, officers, officials
or employees.
(e) It is not the intent of this Franchise to acknowledge, create, imply or
expand any duty or liability of the City with respect to its role as a franchising authority, in the
exercise of its police powers or for any other purpose. Any City duty nonetheless deemed
created shall be a duty to the general public and not to any specific party, group or entity.
Page 35
SECTION 12. MISCELLANEOUS PROVISIONS.
12.1 Voluntary Agreement. Charter shall agree that it enters into the Franchise
voluntarily in order to secure and in consideration of the grant from the City of a ten (10) year
Franchise.
12.2 Governing Law and Venue. The Franchise shall be governed by and construed
in accordance with the laws of the State of Washington and Charter consents to jurisdiction and
venue in the state and federal courts of the State of Washington. In any action or suit to enforce
any right or remedy under the Franchise, the prevailing party shall be entitled to recover its costs,
including without limitation reasonable attorneys' fees.
12.3 Separability. If any portion of this Franchise Ordinance shall be declared by a
court of competent jurisdiction to be void or unenforceable, then the City and Charter shall
negotiate in good faith to modify the Franchise and/or this Franchise Ordinance as may be
necessary to meet the requirements of the law. However, such portion shall be deemed a
separate, distinct and independent provision and such holding shall not affect the validity of the
remaining portions of this Franchise Ordinance.
12.4 Consent. Wherever the consent or approval of either Charter or the City is
specifically required in this Franchise Ordinance, such consent or approval shall not be
unreasonably withheld or denied.
12.5 Ordinances Terminated. The cable television franchise as originally granted by
Ordinance No. 93-115, shall be deemed terminated upon the Effective Date of this Franchise
Ordinance, provided that any unpaid Franchise Fees and other outstanding liabilities and
obligations of Charter to the City under such pre-existing franchise shall survive such
termination.
12.6 No Third Party Beneficiaries. There shall be no third party beneficiaries of this
Franchise Ordinance.
Page 36
12.7 Written Notice. Unless otherwise provided by federal, State or Local law, all
notices, reports or demands pursuant to this Franchise Ordinance shall be in writing and shall be
deemed to be sufficiently given upon delivery to a person at the address set forth below, or by
U.S. certified mail, return receipt requested or by nationally or internationally recognized courier
service such as Federal Express. Charter shall provide thirty (30) days' written notice of any
changes in rates, programming services or channel positions using any reasonable written means.
If to City: City of Yakima,
129 North Second Street
Yakima, WA 98901
With a Copy to: Attn: Communications & Public Affairs Director
129 North Second Street
Yakima, WA 98901
If to Charter: Attn: Director of Government Affairs
Charter Communications
222 NE Park Plaza Drive, #231
Vancouver, WA 98684
With a Copy to: Attn: Vice President of Government Affairs
Charter Communications
12405 Powerscourt Drive
St. Louis, MO 63131
Such addresses may be changed by either party upon notice to the other party
given as provided in this Section.
12.8 Franchise Ordinance Acceptance. Charter, within sixty (60) days after the date
of adoption of the Franchise Ordinance by the City Council, shall execute and return to the City
three (3) original Franchise Ordinances, in which Charter shall declare that it has carefully read
the terms and conditions of this Franchise Ordinance and accepts all of the terms and conditions
of this Franchise Ordinance and agrees to abide by the same. In accepting the Franchise, Charter
acknowledges that it has relied upon its own investigation of all relevant facts, that it has had the
assistance of counsel, that it was not induced to accept a Franchise, that this Franchise Ordinance
represents the entire agreement between Charter and the City, and that Charter accepts all
Page 37
reasonable risks related to the interpretation of this Franchise Ordinance. The executed
Franchise Ordinance shall be returned to the City together with proof of insurance as provided in
Sections 11.3(4) (b) of this Franchise Ordinance. In the event Charter fails to accept this
Franchise Ordinance as provided for herein, or fails to provide the required accompanying
documents, the Franchise Ordinance shall be null and void.
12.9 Effective Date. This Franchise Ordinance shall be effective on September 7,
2014. Provided, however, that if Charter does not accept this Franchise pursuant to Section 12.8
and comply with all conditions for such acceptance set forth herein within sixty (60) days after
passage of this Franchise Ordinance, this Franchise Ordinance shall be null and void.
PASSED BY THE CITY COUNCIL signed and approved this 5th day of August, 2014.
ATTEST:
Publication Date: August 8, 2014
Effective Date: September 7, 2014
Signature of Applicant:
Mayor
Falcon Video Communications, L.P., 1/k/a Charter Communications
Signature:
Name/Title:
Date:
Page 3 8
MRk E- E5iZELJ.14
`
ALT& al/ 0 lL
EXHIBIT A.
CUSTOMER SERVICE STANDARDS
CODE OF FEDERAL REGULATIONS
TITLE 47 -- TELECOMMUNICATION
CHAPTER I -- FEDERAL COMMUNICATIONS COMMISSION
SUBCHAPTER C -- BROADCAST RADIO SERVICES
PART 76 --CABLE TELEVISION SERVICE
§ 76.309 Customer Service Obligations
(a) A cable franchise authority may enforce the customer service standards set forth in
section (c) of this rule against cable operators. The franchise authority must provide affected
cable operators ninety (90) days written notice of its intent to enforce the standards.
(b) Nothing in this rule should be construed to prevent or prohibit:
(1) A franchising authority and a cable operator from agreeing to customer service
requirements that exceed the standards set forth in section (c) of this rule;
(2) A franchising authority from enforcing, through the end of the franchise term,
preexisting customer service requirements that exceed the standards set forth in
section (c) of this rule and are contained in current franchise agreements;
(3) Any State or any franchising authority from enacting or enforcing any consumer
protection law, to the extent not specifically preempted herein; or
(4) The establishment or enforcement of any State or municipal law or regulation
concerning customer service that imposes customer service requirements that exceed, or
address matters not addressed by, the standards set forth in section (c) of this section.
(c) Effective July 1, 1993, a cable operator shall be subject to the following customer service
standards:
(1)
Page 39
Cable System office hours and telephone availability.
(i) The cable operator will maintain a local, toll-free or collect call telephone
access line which will be available to its subscribers twenty-four (24) hours a day,
seven days a week.
(A) Trained company representatives will be available to respond to
customer telephone inquiries during normal business hours.
(B) After normal business hours, the access line may be answered by a
service or an automated response system, including an answering
machine. Inquiries received after normal business hours must be
responded to by a trained company representative on the next business
day.
(ii) Under normal operating conditions, telephone answer time by a customer
representative, including wait time, shall not exceed thirty (30) seconds when the
connection is made. If the call needs to be transferred, transfer time shall not
exceed thirty (30) seconds. These standards shall be met no less than ninety
percent (90%) of the time under normal operating conditions, measured on a
quarterly basis.
(iii) The operator will not be required to acquire equipment or perform surveys
to measure compliance with the telephone answering standards above unless an
historical record of complaints indicates a clear failure to comply.
(iv) Under normal operating conditions, the customer will receive a busy
signal less than three percent (3%) of the time.
(v) Customer service center and bill payment locations will be open at least
during normal business hours and will be conveniently located.
(2) Installations, outages and service calls. Under normal operating conditions, each
of the following four standards will be met no less than ninety-five percent (95%) of the
time measured on a quarterly basis:
(i) Standard installations will be performed within seven (7) business days
after an order has been placed. "Standard" installations are those that are located
up to one hundred twenty-five (125) feet from the existing distribution system.
(ii) Excluding conditions beyond the control of the operator, the cable
operator will begin working on "service interruptions" promptly and in no event
later than twenty-four (24) hours after the interruption becomes known. The cable
operator must begin actions to correct other service problems the next business
day after notification of the service problem.
(iii) The "appointment window" alternatives for installations, service calls, and
other installation activities will be either a specific time or, at maximum, a four
(4) hour time block during normal business hours. (The operator may schedule
service calls and other installation activities outside of normal business hours for
the express convenience of the customer.)
(iv) An operator may not cancel an appointment with a customer after the
close of business on the business day prior to the scheduled appointment.
(v) If a cable operator representative is running late for an appointment with a
customer and will not be able to keep the appointment as scheduled, the customer
Page 40
will be contacted. The appointment will be rescheduled, as necessary, at a time
which is convenient for the customer.
(3) Communications between cable operators and cable subscribers.
(i)
Refunds. Refund checks will be issued promptly, but no later than either -
(A) The customer's next billing cycle following resolution of the
request or thirty (30) days, whichever is earlier; or
(B) The return of the equipment supplied by the cable operator if
service is terminated.
(ii) Credits. Credits for service will be issued no later than the customer's next
billing cycle following the determination that a credit is warranted.
(4) Definitions.
(i) Normal Business Hours. The term "normal business hours" means those
hours during which most similar businesses in the community are open to serve
customers. In all cases, "normal business hours" must include some evening hours
at least one (1) night per week and/or some weekend hours.
(ii) Normal Operating Conditions. The term "normal operating conditions"
means those service conditions which are within the control of the cable operator.
Those conditions which are not within the control of the cable operator include,
but are not limited to, natural disasters, civil disturbances, power outages,
telephone network outages, and severe or unusual weather conditions. Those
conditions which are ordinarily within the control of the cable operator include,
but are not limited to, special promotions, pay-per-view events, rate increases,
regular peak or seasonal demand periods, and maintenance or upgrade of the
Cable System.
(iii) Service Interruption. The term "service interruption" means the loss of
picture or sound on one or more cable Channels.
Page 41
EXHIBIT B.
SAMPLE FRANCHISE FEE PAYMENT REPORT
Page 42
Summary of Revenues3
Subject to Franchise Fee
Print Date 1/15/2013
Run Date 1/1572013 73823A14
Vendor Code: 00150908
FCC ID:
83326 WA Group Frequency: Monthly
Base Period: 12
1893/25 Yakima, WA, City of
Source FTA Code(s): 8805/1600/0030,6800,8204/100013580,8204/2000/6880
201201 201202 201203 201204 201235 201206 201207 201208 201209 201210 2011211 2012212 Total
BASIC CABLE SERA 227,863.54 228,473.09 233,843.60 234,033 42 238,12723 230,06253 228,789.35 228,052.56 225,586.77 226,721.62 232,037.86 232,79298 2766,385.05
INSTALLATION CI11 9.383-39 10,542.78 11,518.75 10,634.07 7,845.45 8,411.29 15,299.56 13,687.33 14,920.15 1,768.71 10,273.61 8,781.13 123,064.22
BUJ( REVENUE 39,420.40 39,531.16 39,599.55 39,157.12 39,135.78 38,471.42 38,868.24 3924153 3988670 39,366.30 38,96935 39,20219 470,048.29
EXPANDED 60SIC- 218,50855 21853852 225,971.25 229,620.59 230,880.90 228,390.58 225,937.38 230,61341 235,579.01 238,461.97 242,234,65 246239.80 2,771,171.31
PAY SERVICE 70,747.88 69,898.09 70,32258 59,604.69 70,064.20 70,034.91 69,297.37 66754.72 67,58151 68582.90 68,637.50 66,963.86 83249421
PAY PERVIEW 34,416.10 31,001.58 26,99572 32,094.46 28,7025 47,145.92 30,04792 26,640.73 29,391.33 26,668.71 27,35225 37,18129 377,70526
FRANCHISE FEE ft 43,38056 43,125.05 44,592.14 46,403.34 45,9470 46,9490 45675.68 454.5130 46,024.26 46277.08 46.831.02 47,790.80 548,511.99
ADVERTISING REV 42,220.12 38,99521 30,387.33 36,538.77 50918.67 42,154.70 45,471.50 45,019.48 44,531.55 55,172.19 71,99210 47,837.94 551,239.56
I-IOMESHOPPiNGI 5,42646 4,473.10 4,919.50 5,577.83 4,305,40 5,565.51 4,958.45 3,662.43 4,376.53 4,172.82 4,874.02 5,493.07 57,795.72
DIGITAL SERVICES 108,737.46 109,133.99 111,930.20 111,222.83 110,835.79 110,084.47 111,889.35 122,94652 125,789.91 127,97056 129,055.13 130,757.39 1,409,433.57
INSIDE WIRING 9,156.82 9,165.39 9,449,14 9,819.75 9,776.95 9,549.60 10,147.66 10,826.04 9,569.74 9,789.12 9,43297 9,533.66 116,116.04
OTHER REVENUE 89028 887.67 896.14 90217 891,00 686.72 874.34 870.05 866.15 231.55 856.29 851.52 9,903.88
EQUIPMENT RENT, 27,256.43 27,692.60 28,054.92 28,135.04 27,994.46 28.034.61 25,120,56 15,78099 15,241.13 16,187.52 16,719.77 18,785.84 274,983.87
PROCESSING FEE1 14,527.66 12,881.84 18,407.33 20,251.13 21,415.08 22,267.85 22,256.73 21,96423 21,448.78 21,151.43 21,287.34 21,97181 239,83522
BAD DEBT (3,38127) (14,363.10) (7,853.64) (3,357.99) (10,362.88) (11,825.00) (20597.66) (12,908.09) (11,245.11) (10,617.60) 42.11 (10,748.09) (117,218.31)
REVENUE 84853398 829,980.94 848,123.46 870,897.82 876,545.28 876,183.78 853,916-43 860,602.83 868,751.01 871,90398 920591.97 905,439.19 10,431,470.68
FEE CALCULATED 42,426.70 41,499.05 42,406.17 43,544.89 43,82726 43,809.19 42,695.82 43,030.14 43,437.55 43,595.20 46,029.60 45,271.96 621,573.53
FEE 42.426.70 41,499.0.5 42,406.17 43,544.89 43,82726 43,809.19 42,695.82 43,030.14 43,437.55 43,595.20 46,029.60 45,271.96 521,573.53
Fee Factor. 5%
EXHIBIT C
SAMPLE PEG CAPITAL REPORT
Page 43
EXPLANATORY NARRATIVE
Service Unit 428 — Capital Improvement
This service unit provides accurate tracking of expenditures using funds from an Access
Television Facilities and Equipment Grant provided to the City by Charter Communications
as per its cable communications franchise agreement with the City. Use of Grant moneys is
restricted to expenditures related to YCTV and Y -PAC equipment and facilities. Constraint
has been exercised in the expenditure of Grant moneys in order to provide adequate capital
funds during the final three years (2012 - 2014) of the Charter Communications franchise
agreement, during which no Grant payments will be received.
CAPITAL OUTLAY
Item
Cost
Funding Source
Justification
Purchase YCTV/Y-PAC
building and property from
the City Fire Capital Fund
$316,250
Community
Relations Fund
reserves
Provide much-needed infusion of resources to the
Fire Capital Fund to meet critical emergency
response needs while also eliminating lease
payments from the Community Relations Division
budget (see "Strategic Initiatives")
YCTV/Y-PAC acquisition gear
(cameras, microphones, cords,
etc.)
$8,000
Franchise Fees
Improve quality and versatility of equipment used
by division staff in the production of Y -PAC
programming.
YCTV / Y -PAC facility Studio
"A" lighting upgrade
$12,000
Franchise Fees
Studio "A" lighting fixtures currently in use range
in age from 5 to 22 years. Replacing outdated
lighting fixtures in Studio "A" with modern
fluorescent fixtures will improve both video quality
and safety.
YCTV/Y-PAC Streaming
System
$13,000
Franchise Fees &
Access
Television
Facilities &
Equipment
Grant
More and more viewers are requesting access to
YCTV/Y-PAC programming via Internet streaming.
The addition of streaming capability will make
YCTV/Y-PAC programming available to a
considerably larger audience.
Editing suite upgrade
$12,000
Access
Television
Facilities and
Equipment
Grant
Additional software and hardware upgrades are
required in order to maximize the capabilities of the
three YCTV / Y -PAC editing suites currently in
operation.
YCTV/Y-PAC Facility
Upgrade
$10,000
Access
Television
Facilities and
Equipment
Grant
In 2013, planned upgrades to the YCTV/Y-PAC
facility include replacement of aging flooring,
upgrade of kitchen fixtures, and exterior painting.
Ancillary YCTV / Y -PAC
production gear (portable
lighting, wireless
microphones, tripods, tape-
less recorders, etc.)
$12,000
Access
Television
Facilities and
Equipment
Grant
As the transition to an all digital platform for YCTV
and Y -PAC productions continues, ancillary gear
also needs to be replaced so as to be compatible
with digital equipment.
Service Units 428 and 434
$383,250
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 14.
For Meeting of: August 05, 2014
ITEM TITLE: Ordinance regarding proposed Cable Communications
System Franchise Renewal
SUBMITTED BY: Randy Beehler, Communications & Public Affairs Director
SUMMARY EXPLANATION:
The City's existing cable communications system franchise ordinance with Falcon Video
Communications, L.P. I/k/a Charter Communications ("Charter") expired in January 2014.
Since early 2013, the City has been engaged in active informal negotiations with Charter to
renew the franchise in accordance with federal law. The proposed cable communications
system franchise renewal document (see attached) provides the City with the ability to
effectively manage the utilization of public rights-of-way while also allowing Charter the flexibility
necessary to deliver high quality cable communications service to subscribers within the city
limits of Yakima.
Resolution: Ordinance: X
Other (Specify):
Contract: X Contract Term: 10 years
Start Date: 2014 End Date: 2024
Item Budgeted: Amount:
Funding Source/Fiscal
Impact:
Strategic Priority: Partnership Development
Insurance Required? No
Mail to:
Phone:
APPROVED FOR
SUBMITTAL:
City Manager
RECOMMENDATION:
Staff recommends Council approval of the proposed cable communications system franchise
renewal document.
ATTACHMENTS:
Description
Memorandum - Cable Franchise Renewal - 7-31-
14
❑ charter franchise ordinance
Upload Date
7/7/2014
7/22/2014
Type
Cover Memo
Ordinance
hfiE ORA DUM
To: Yakima City Council
From: Communications & Public Affairs Director Randy Beehler
Subject: Cable Communications System Franchise Renewal
Date: Thursday, July 31st, 2014
Council members,
Under federal law, the City serves as a Local Franchise Authority ("LFA") with jurisdiction over
the granting of and administration of cable communications system franchises, which give
authority to cable TV providers to occupy public rights-of-way in Yakima to construct, operate,
and maintain cable communications systems. The only existing cable communications system
franchise granted by the City, which took effect in 1994, is currently held by Falcon Video
Communications, L.P. I/k/a Charter Communications ("Charter"). The term of that franchise was
twenty (20) years, and expired in January of 2014.
Federal law proscribes a process by which an existing franchise can be renewed though either
formal or informal negotiations. The City began active informal negotiations with Charter
regarding renewal of the cable communications franchise in early 2013. The City contracted
with the Bailer Herbst Law Group to assist it with research, analysis, and negotiation activities
associated with the franchise renewal process.
As part of the franchise renewal process, a community needs assessment was performed to
determine whether amendments to the existing Charter franchise should be made in Tight of
technological, legal, and other evolutions that have occurred since the franchise took effect in
1994. Based on the community needs assessment and other research, several amendments to
the existing franchise, mostly of a technical nature, were proposed by the City and negotiated
with Charter. In turn, Charter proposed additional potential language changes be made to the
existing franchise.
The proposed renewed cable communications system franchise document (see attached)
provides the City with the ability to effectively manage the utilization of public rights-of-way while
also allowing Charter the flexibility necessary to deliver high quality cable communications
service to subscribers within the city limits of Yakima. Notably, the proposed renewed cable
communications system franchise document also provides for significant financial support from
Charter to assist the City in meeting the capital needs of the City's public access (YCTV) and
government access (Y -PAC) cable TV services.
The Council is being asked to consider renewing the cable communications system franchise
granted to Charter and to include the applicable amendments that have been mutually
negotiated between and agreed to by the City and Charter. The term of the renewed franchise
would be ten (10) years and would take effect thirty (30) days after its publication.
Please let me know if you have any questions regarding the proposed renewed cable
communications system franchise document, the process that led to its development, or any
other issue related to this matter prior to the Council's August 5th business meeting.